By CCN: Tesla reportedly funds itself by selling credits to traditional auto manufacturers. Tesla sells fewer units, which are more efficient by lightyears, so it has excess government credits to sell, which other members of the industry, including GM lap up.

Will Tesla Turn It Around?

For years, Tesla has behaved more like a Silicon Valley company than an automaker. They don’t come to mind when you think of investing in US automobiles, but perhaps they should.

The company’s stock has seen high volume and skyrocketing values. Whether or not it will continue this trend or gradually deflate is currently a question, but probably not a very good one.

The better question is how long it will be until the whole industry, including TSLA, rise back up. There are good reasons to believe that the market is currently over-saturated with vehicles. If companies continue producing without getting significant sales, eventually people are going to realize something’s wrong.

For its part, Tesla has tried to branch beyond automobiles. The company is also reportedly working on selling home batteries, which might provide a revolutionary alternative energy solution for everyday homeowners. When and if such options become available, companies like Tesla will offer them. It may become the future of the power grid.

People power up their batteries now and then, but most people no longer have a constant need for the power grid. This frees up energy and lowers demand, making it cheaper, which starts a cycle.

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